What is a single-step income statement?

A single-step income statement is a simple income statement format in which all revenues are listed on one line and all expenses are listed on another. The difference is represented as net income. This format differs from a multi-step income statement, which offers more itemized details.

Because revenue and expenses aren't broken down in separate categories on a single-step income statement, it is not possible to calculate ratios such as gross margin or operating margin from it. Additional documents are needed to compute these ratios. For this reason, the single-step format isn't used as much as the multi-step format. A multi-step statement also breaks down expenses into variable and operating costs.